New York state hospitals worry that the governor's plan to legalize medical marijuana to treat serious illnesses could put them on the wrong end of federal laws--jeopardizing their government funding, according to an article in Crain's New York Business.

Gov. Andrew Cuomo (D) announced Wednesday he would allow 20 hospitals across the state to distribute marijuana to patients with cancer, glaucoma or other diseases that meet the Department of Health's standards based on a 1980 law, Crain's reported. However, the law does not specifically allow hospitals to buy or sell the drug to patients, and only allows for weed from the federal government or local drug busts, which may not be of medical grade, making it difficult for hospitals to make money off a pot program.

That means the Department of Health would have to fund the medical marijuana program, the article states.

Currently, Maryland is the only state that allows academic medical centers to actually distribute medical marijuana, although none have shown interest so far, Crain's reports. Hospitals in states where medical marijuana is legal often avoid distribution because it contradicts federal law, which could cause them to lose their funding, even with an executive order from the governor.

"Most hospitals are probably not going to be interested in doing it," Patrick McManamon, managing director at Cannasure, which sells insurance for the medical marijuana industry in the 20 states where it is legal, told Crain's.

Last year Massachusetts enacted a compassionate medical marijuana program, but hospitals in the state are concerned they could lose billions in federal funding, and even face trouble with the IRS over their nonprofit status, jeopardizing grants and Medicare and Medicaid payments, based on compliance with federal law, FierceHealthcare previously reported.